Political commentary
The people in between
Ferdinand Mount
Let us risk a scandalous theory: viz, that the trade unions have suffered not merely a temporary setback, but a lasting reverse from which they will never fully recover. No, I didn't mean 'never' — never 'say 'never' ... from which they will recover only when economic, legal and political conditions have altered out of all recogni- tion. There now, we are nicely covered from looking even sillier than usual.
This is not at all how politicians, least of all Tory ministers anxiously awaiting the results of miners' ballots, have been ac- customed to think. It is taken for granted that the quiescence of the trade unions is merely temporary. A slump may moderate wage demands for a time; a Tory govern- ment may deny the union leaders access to Downing Street for four or five years; but sooner or later, they'll be back. The TUC is credited with an inherent elasticity. Elastic, however, does have a habit of losing its snap, often unbeknownst to the possessor until the slow, slithering descent reveals, to general embarrassment, the true state of af- fairs.
With the publication of the second stage of the Tory trade union laws, the Tebbit Bill, it is worth listing those privileges not ended or curtailed and practices now bann- ed or made liable to civil action: mass picketing, blacking, union-only contracts, action to get rid of non-union employees in a closed shop, the immunity of trade unions as collective entities, 'political' strikes. Pussyfooting?
Ah, we are told, but these changes are all irrelevant to the real struggle. Or: ah, but the changes have not been tested yet; when the economy recovers and the unions recover their nerve, you'll see some fireworks again. Yet it may be that these reforms can be passed into law in the first place only because the trade unions have already suffered a crucial defeat which can- not be easily reversed.
Take Mr Francis Pym, the Cabinet's Eeyore, Cassandra-in-residence. In the splendid dampener he delivered to the an- nual dinner of the Allied Brewery Trades Association — how they must have sobbed into their stout — Mr Pym forecast, no doubt rightly, falling living standards and no early reduction in unemployment.
But if we can look forward to no early reduction in unemployment, then we can look forward to no early return to trade union militancy either. And that means too that the government is bound, whether it knows it yet or not, to regain and retain some power over the general level and structure of wages. Nothing spreads like im- potence.
Pay rises in private industry are now said to be running between 4 and 6 per cent; in the public sector, the figure is higher, but not all that much higher; the local authority manual workers have settled for 7 per cent, the miners for 9 to 10 per cent. The overall rate of increase cannot be much more than 7 per cent — which is 5 per cent less than the present rate of price rises. Workers are therefore taking a cut of about 5 per cent in their standard of living this year.
What of the unemployed themselves? At present, Sir Geoffrey Howe intends to cut the real level of their benefit by 2 per cent. Most Tory MPs now feel that he will not and should not get away with this; there is no reason why the unemployed should be expected to make a contribution to the general retrenchment when they have already made an extremely painful con- tribution by being sacked. So everyone ex- pects the Budget to restore the 2 per cent for the unemployed, Marx's 'reserve army' of capitalism.
But if unemployment at the 3 million mark or more continues, the wages of the reserve army will gradually draw closer to the wages of the main army. The political imperative of inflation-proofing the dole combines with the economic imperative of real wage cuts to effect a significant and quite long-term change in the structure of wage bargaining.
Nor is this all. For in between the 3 million unemployed and the 23 million employed, there is a third army growing: the 550,000 who are kept in work, or at any rate off the unemployment register, by various government subsidies — Youth Op- portunities Programme, Community Enter- prise, the Job Release Scheme and, since the New Year, the Young Workers Scheme invented by Mrs Thatcher's economic ad- viser, Professor Alan Walters.
Under the Walters scheme, an employer who takes on a worker under the age of 18 can claim £15 a week from the government for the first year of employment where the worker's gross earnings are less than £40, or £7.50 a week where the earnings are no higher than £45. The idea is to encourage employers to take on young people at 'realistic' rates.
The first thing to note is its relative cheapness, at most £750 a year per person. This compares with the £80 million of public money given over 4 years to Mr. De Lorean to employ 2,000 Belfast workers on his gull-winged whizzer — that is, £10,000 per man per year. The De Lorean boondog- gle breaks no records. Some jobs in Nor- thern Ireland, at Courtaulds for example, are said to have cost the taxpayer £20,000 per man, and wretchedly impermanent they have turned out to be too.
above its present levels, any goverranell,, will be increasingly attracted to extend such schemes. Professor Richard Layard s scheme is popular, both in and out of the SDP; this involves paying a much large.ill subsidy, of £70 per week for a full year (tt' 'only' £3,500 in toto) to any employer 0111° takes on someone who has bee unemployed for a period of more than months. But if the army of the in-between sub- sidised workers goes on growing, to million or more, then labour markets af going to look very different. Hurried of forts by the sharper union leaders, such as Clive Jenkins, to enrol the in-between workers in the relevant union call° outflank the combined power of tl:.e government and employer to dictate sub union pay rates. Of course, the in-betweens are not 91 posed to compete for the jobs of normal full-time workers. Already, at every clues.; tion time, Labour MPs besiege Mr Tebbl with complaints that employers are asingf the government schemes as a source, a cheap labour. 'Substitution' is the new word. It is fiendishly hard to prove, but' br practice, once the numbers on the labou grow beyond a certain size, tbe)' reserve i cannot help offering a rival source cheaper labour — and so exerting a Perilf nent downward pressure on wage s'-- tleTmheenttsra. trade unions hate this. But they Cie not stop it, because the pressure on t"d government to invent work for unemPlaYe.r is a moral pressure. In any case, it was tbeclo exorbitant wage demands that threw ' many millions out of work in the first Place' Tory politicians have little to crow abl)Ilid either. The last thing Mrs Thatcher wall a wish to be remembered for is creating fac million 'phoney' jobs. Besides, it is 'fie from certain that the voters will take I" outcome as a beneficial instance of the the visible Hand at work. They may regard `"„ new reserve army as the victims of a er'., trick, sufferers from a relative deprivatia'' forced upon them by a heartless Vr) government. We may see a kind of Runciman Effect, herein named after the Hon W. G. 11°,a0: ciman, author of the theory that what P': a pie mind about is not being poor but boa,e poorer than other people. By 1984' I'd could see workers, subsidised workers a.no unemployed alike, all begin to enjoy tis111;; real incomes; and yet the difference II' t status between the three categories Mi800 still be resented as a scandal and blamed the government. Thus Mrs Thatcher might score a sljl tacular triumph over inflation and so receive no thanks for it. And the trar unions might yet be compensated for thaein well-deserved industrial impotence by r undeserved political revenge. Whatever "to Pym's personal motives, he is quite right dampen expectations. For the lower -es' public's expectations, the better the Tall chances of matching them.
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